A Mixed Economy in the NHS

Privatisation Social Enterprise
In Hackney the NHS funds more than 100 mental health organisations, ranging from support from Somali women to Sane, the national help-line and IRIS, an rape-support service. The NHS needs organisations like this. What they don’t do is cherry-pick easy cases or over-treat. Transaction (tendering etc.) costs are minimal so far as I know.
It’s absolutely right that the NHS funds services like these that it cannot provide itself, but I can think of no good reason why existing NHS services should be tendered out to private providers. See my response to accusations of extremism on Radio 3.
My objections are to a system of competing corporate providers in a system based on competition for patients and profits, which is associated with cherry-picking, disease mongering, fraud, increased costs and inequity.
The NHS is incapable of effective contracting with the big corporations. For example, NHS choices was burned badly when the contract for management went to Capita and they are now trying to take it back in-house. I don’t think CCGs are anything like skilled enough  to run tendering processes effectively. As a minimum they need to recognise that corporate teams will:
  1. Present a lowest possible price option with alternative options for every eventuality, which will invariably be necessary and far more expensive than the lowest price.
  2. Pimp their bid with claims of ‘innovation’, ‘choice’ etc. etc. to satisfy very clearly every point of specification.
  3. Appeal if they do not win bids. They will not miss an opportunity to use lawyers to frighten commissioners.
  4. Pay their design teams to make their bids look very slick.
  5. Have teams who are paid a big commission to win bids but have no interest in the project afterwards.
  6. Keep these teams entirely separate from those responsible for fulfilling the contract who will say they knew nothing of the bid, that it was a different team and the small print says they are only paid for a part of the contract
GPs are independent providers, but are very rarely associated with cherry-picking etc. I think we need to be very wary though, because QoF already encourages disease mongering and over treatment, there is already significant inequity and as boundaries are broken down there will be cherry-picking/ patient selection.